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The (Potential) Location-Based Services Revolution

Melissa Parrish, Analyst

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Melissa Parrish, Analyst

@melissarparrish

September 14, 2010

Three categories of location-based services

Growth indicators

Recommendations

Agenda

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Recommendations

What it means

Philip has a lunch date

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This is NOT the LBS landscape

� Overwhelming and intrusive advertising

� Constant "shouting" of messages

� No opt-in, no opt-out

� Misuse of private information

But it illustrates some of what drives consumers’ fears about location-

based services and technology

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Marketers are interested in 3

LBS categories: mapping &

search, shopping, and social

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search, shopping, and social

Mapping, Navigation & Search

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� Overall, 13% of online cell phone owners look up

directions or maps at least monthly

� Among online smart-phone owners, this number

increases to 50%

� Among smart-phone owners, 31% have used an

Mapping mobile adoption

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� Among smart-phone owners, 31% have used an

application for maps within the past three months.

Internet is preferred local search method across generations

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Top 3 search topics include “Local”

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Mobile Search Users % Of Mobile Internet Users

Mobile Search Usage Is Growing

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Source: Forrester Research Mobile Advertising Forecast, 2010-2015 (US)

Mapping, navigation & search takeaways

� Extension of a long-standing, non-digital consumer behavior

� May or may not be mobile-based

� Already part of SEM mix for many marketers

� Consumer adoption linked to increased access to more powerful hardware

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� Forrester expects 74% of mobile internet users to perform 13 mobile

searches per month by 2015

Shopping

ShopAlerts

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28% of mobile online users are interested in some form of discounts or promotions

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Only 3% have requested a

mobile coupon, and only

another 3% have used one

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another 3% have used one

Improved discoverability & convenience will drive adoption

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Social

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Tons of buzz, but not tons of users…..yet

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But those who do use LBSN are highly influential

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Young, well-educated males use LBSNs

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And they use other LBS more than other consumers too

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Advice for marketers

� Companies with a culture and budget that supports experimentation should start

testing now

� Others should jump in when scale matches business objectives

� Explore all LBSNs

� Create incentives for new customers

� Offer discounts and coupons

� Reward loyal customers

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� Reward loyal customers

Three categories of location-based services

Growth indicators

Recommendations

Agenda

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Recommendations

What it means

Mobile is becoming

increasingly important and

marketers are taking notice

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marketers are taking notice

Mobile Internet Users (1x/mo)% Mobile Internet UsersUsing Internet-Centric Phones

Mobile Internet and Internet-Centric Phone Usage Is Growing

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Source: Forrester Research Mobile Advertising Forecast, 2010-2015 (US)

Mobile marketing is growing, too

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Three categories of location-based services

Growth indicators

Recommendations

Agenda

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Recommendations

What it means

How can you ensure the growth

of collaboration between

services and marketers?

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services and marketers?

Address users’ needs

� Allay privacy concerns

� Integrate marketers in a way that presents their messages and offerings

as true service

� Think about utility in addition to convenience

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Consider the marketers’ perspective

� Majority look for scale

� Case studies help close the deal

� Help educate them about how it fits into the marketing mix

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Three categories of location-based services

Growth indicators

Recommendations

Agenda

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Recommendations

What it means

Imagine Philip’s lunch date again, but this time…

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Thank you

Melissa Parrish

+1 212.857.0784

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+1 212.857.0784

mparrish@forrester.com

@melissarparrish

www.forrester.com